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Real estate confusion

New B.C. real estate rules - Part 2:  Disclosure of risks to unrepresented parties

This is part two of a multiple part instalment that will summarize the new real estate rules, and what these new rules mean to you as a buyer and/or seller of real estate in British Columbia. 

These new rules for real estate licensees in B.C. came into effect on June 15.

Limited Dual Agency is all but banned in the province, but “double ending” is not. 

A real estate professional can still facilitate a sale between two parties, however, if this is the case, then, one of the two parties must be “unrepresented."

The second form in this series to be explained is the “Disclosure of Risks to Unrepresented Parties," which is the form an unrepresented party must sign to continue with a purchase from the listing agent.

The objective is to inform the party who is not being represented what the real estate professional can and cannot do for them.

The form sets out “a real estate professional representing someone else in the transaction can only give limited assistance, such as:

  • Sharing real estate statistics and general market information;
  • Providing standard real estate contracts and other relevant documents;
  • Helping you fill out a standard real estate contract (but they cannot advise you about what to include in the offer);
  • Communicating your messages to their client , and from their client to you; and
  • Presenting your offers or counter offers to their client, and from their client to you.”

In the real estate world, being a client means the realtor:

  • owes you the fiduciary duty of loyalty
  • must avoid conflicts of interest
  • fully disclose relevant information and confidentiality.

Being an unrepresented party means you are not entitled to any of these special legal duties.

After being presented with and reading this form, if you decide to continue without representation, you may now proceed with writing an offer with the listing realtor and get on with purchasing some real estate.

The reality is, you can purchase a home from the same real estate professional who has it listed.

The real estate professional’s job is, however, now limited to giving facts on a property or general information rather than opinions or advice, and writing a contract under your direction without giving you guidance.

Once again, signing this form by the real estate professional is mandatory. For the buyer and/or seller who the form is designed to protect, signing is, once again, optional.

Once this form is presented and maybe signed, and before your offer can be presented, another form called “Agreement Regarding Conflict of Interest Between Clients” must be presented to both buyer and seller (stay tuned for our August article explaining this form).

Are you asking “what’s the point”?  Are you confused?

Me too.

The only way to make a change to these new rules is for the public to speak up.

If you want the choice of being able to speak freely with a realtor and receive more than just “how many bedrooms” and “how many bathrooms” a home has without being bogged down in paperwork first, contact:

Tell them what you think.



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New rules for real estate

New B.C. Real Estate Rules, Part 1

This is part one of a multiple-part instalment that will summarize the new real estate rules, and what these new rules mean to you as a buyer and/or seller of real estate in British Columbia. 

These new rules for real estate licensees came into effect on June 15. The objective is to “enhance consumer protection by:

  • increasing the number and frequency of disclosures that real estate licensees must make to consumers
  • in almost all cases, preventing real estate licensees from acting for both a buyer and a seller in the same transaction.”

Now that Limited Dual Agency is all but banned in the province, explaining to buyers and sellers the different forms of representation is first and foremost.

Before a buyer or seller receives any real estate advice and prior to you giving any potentially confidential or personal information to the realtor, that buyer or seller must sign a new form.  

This first form is called the Disclosure of Representation of Trading Services (replacing the Working With a Realtor form that was previously utilized).

This form explains the special legal duties that real estate professionals owe to their clients, and helps consumers decide whether they wish to be represented by a realtor, or whether they wish to be an unrepresented party. 

In the real estate world, being a client means the realtor owes you the fiduciary duty of loyalty, must avoid conflicts of interest and fully disclose relevant information and confidentiality.  

Being an unrepresented party means you are not entitled to any of these special legal duties mentioned above. After reading this form, if you decide not to be represented, there is another form the real estate professional is required to present to you, called the Disclosure of Risks to Unrepresented Parties.   

The real estate professional’s job has now been limited to giving facts on a property or general information rather than opinions or advice without first presenting you with the above form.

However, the buyer or seller does not have to actually sign this form. For the realtor presenting the form however, signing is mandatory. For the buyer and/or seller who the form is designed to protect, signing is optional.  

Are you asking “what’s the point?"  Are you confused?  

Me too.  

The only way to make a change to these new rules is for the public to speak up.

If you want the choice of being able to speak freely with a realtor and receive more than just “how many bedrooms” and “how many bathrooms” a home has without being bogged down in paperwork first, contact:

Tell them what you think.



Tax hurts Okanagan

On Feb. 20, the B.C. government unveiled its 2018 budget and an accompanying housing plan that included the controversial speculation tax. 

In March, this proposal was modified due to significant outcry. 

The tax is designed to calm high home pries and rents in urban centres that are beyond local incomes. The government states that speculation has contributed to huge price increases and making it difficult for British Columbians to find a home they can afford. 

By pushing these “speculators” out of the housing market, this will turn vacant properties or short-term vacation rentals back into the housing market for people who live and work in B.C. to buy or rent at a more reasonable amount. 

While the government wants to address housing affordability, is this tax one that will accomplish this goal?  Or will it do the opposite by killing jobs, hurting Okanagan tourism (and real estate) and make the housing affordability issue worse?

Is this tax going after the real speculators, or is it only targeting hardworking taxpayers and those from our neighbouring provinces who visit B.C. and specifically the Okanagan to vacation, bringing their paycheque to share with businesses that depend on those seasonal tourism dollars to survive?

The government states that

“the tax is designed to capture foreign and domestic speculators, satellite families who live in B.C. but do not pay their share of income taxes, as well as homeowners who hold vacant property in designated urban centres. Over 99 per cent of British Columbians are estimated to be exempt, because they will not have a vacant second home in the affected areas.” 

In the Okanagan, we rely on these so-called “speculators” (we have a different name for them; we call them “tourists," “patrons,"  “clients," and in, some cases, “friends” and “family”) to fuel our economy. 

They visit our communities, buy our groceries, drink our coffee, rent our boats, houses and condos, eat in our restaurants and even drink our more expensive alcohol and buy our inflated fuel. 

No, they do not contribute to our British Columbia income tax base, but for the most part, these Okanagan “speculators” do pay Canadian income taxes to support federally funded programs that all Canadians benefit from.

Without these “spectulators,” our communities and the many tourism-oriented businesses suffer or cease to exist.  

We can argue that areas such as Vernon, Penticton and the Shuswap are not affected by this tax, but don’t kid yourself. This will affect any tourist town in B.C. because Albertans are furious. 

They were angry and annoyed with British Columbians about the lack of cooperation over the Kinder Morgan pipeline, and now they are livid about this new tax.

We have spoken to many Albertans and most, if not all, are upset. They would rather pull their money from our communities – regardless of location – than support our provincial government for one more day. 

If you are against this speculation tax, like I am, there is a way to fight it. Leading the charge in the effort to fight this tax is The Coalition. 

This coalition recommends that the B.C. government immediately scrap the Speculation Tax and do the following to address housing affordability:

  • Target real speculators, not long-term homeowners, including many out-of-province residents;
  • Protect our local tourism dependant economies, like Kelowna and the South Island;
  • Reduce the cost of delivering housing units by exempting vacant development land from this tax; 
  • Exempt Canadian and British Columbian taxpayers from this unfair tax measures.

If you’re also concerned, please visit their website, and join the fight. 





Budget targets house prices

How the 2018 budget affects Okanagan real estate

In an effort to cool housing prices in British Columbia, the government’s 2018 budget has introduced numerous changes that affect our real estate market in the Okanagan. 

The following tax changes are being imposed:

Property transfer tax changes

A buyer is charged property transfer tax when purchasing property in British Columbia (some exemptions apply).  The amount of tax is based on a percentage of the fair market value of the land and improvements on the date of registration of the purchase. 

Effective Feb. 21, 2018, the property transfer tax will increase a further two per cent on residential property on the portion of the fair market value greater than $3 million. 

Foreign buyer tax changes:

The existing 15 per cent foreign buyer tax that applied only to Metro Vancouver is being raised to 20 per cent and will apply to expanded areas. This new higher tax will also cover the Victoria and Nanaimo land districts on Vancouver Island, the Fraser Valley, Kelowna and West Kelowna.

Speculation tax added:

This tax will cover the same regions as mentioned above, and is aimed at absentee homeowners. The tax will start at 0.5 per cent of a home’s assessed value for the 2018 tax year and increase to two per cent in 2019. It appears that if the home is a principal residence, if the home is rented long term, or if the owner pays income tax in B.C. – these homeowners will be exempt. The effect on owners of vacation properties in our sunny Okanagan is not yet clear. 

As reported by the Vancouver Sun: 

“NDP Finance Minister Carole James acknowledged her government hasn’t fully modelled the effect of the new tax measures on B.C. real estate prices or calculated the cost of increased auditing and enforcement. But the government wants housing prices to drop, she said.”

Obviously aimed at cooling the housing price mayhem in the Lower Mainland, these taxes are now spreading to include the Kelowna and West Kelowna real estate market, although at this time, does not cover the North Okanagan, South Okanagan or the Shuswap. 



More Just Add Salt! articles

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About the Author

Lisa Salt is a Vernon born Realtor® who, along with her husband Gord Fowler from Calgary, lead one of the most successful and dynamic real estate teams in the North Okanagan. 

An international clay target shooting champion, Lisa brought the attributes of hard work and diligent focus to the real estate industry to create the success she and her team have today. 

To experience the local knowledge and expertise that only someone born and raised in the Okanagan can offer, call Lisa today and 'Just Add Salt'.

Website link:   http://www.saltfowler.com

Contact e-mail address:  [email protected]

 



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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